1-

A genetic experiment with peas resulted in one sample of offspring that consisted of

432432

green peas and

152152

yellow peas.a. Construct a

9595​%

confidence interval to estimate of the percentage of yellow peas.

b. It was expected that​ 25% of the offspring peas would be yellow. Given that the percentage of offspring yellow peas is not​ 25%, do the results contradict​ expectations?

a. Construct a

9595​%

confidence interval. Express the percentages in decimal form.

nothingless than<pless than<nothing

​(Round to three decimal places as​ needed.)

b. Given that the percentage of offspring yellow peas is not​ 25%, do the results contradict​ expectations?

​Yes, the confidence interval does not include​ 0.25, so the true percentage could not equal​ 25%

​No, the confidence interval includes​ 0.25, so the true percentage could easily equal​ 25%

2-

A magazine provided results from a poll of

10001000

adults who were asked to identify their favorite pie. Among the

10001000

​respondents,

1414​%

chose chocolate​ pie, and the margin of error was given as

plus or minus±44

percentage points. Describe what is meant by the statement that​ "the margin of error was given as

plus or minus±44

percentage​ points."

Choose the correct answer below.

A.The statement indicates that the study is only

44​%

confident that the true population percentage of people that prefer chocolate pie is exactly

1414​%.

B.The statement indicates that the true population percentage of people that prefer chocolate pie is in the interval

1414​%plus or minus±44​%.

C.The statement indicates that the interval

1414​%plus or minus±44​%

is likely to contain the true population percentage of people that prefer chocolate pie.

D.The statement indicates that the study is

​100%minus−44​%equals=9696​%

confident that the true population percentage of people that prefer chocolate pie is

1414​%.

You own a boutique store in Lahaina in Maui Island, Hawaii. Your store carries top-of-the-line specialty apparel and fosters a friendly and hospitable environment. You recently attended a marketing conference and listened to several presentations about customer lifetime value (CLV), the total amount a customer will spend from acquisition through the end of a relationship with a brand. You learned that the apparel industry is overhauling to become data-driven and customer-centric. Obtaining the CLV will help you to both decide who to target in advertisement and sales campaigns and assess how effective those campaigns will be at increasing customer value. Consequently, by using CLV metrics, you will be able to segment, profile, and target your customers, understand those customers’ characteristics, and pay them more attention to keep them loyal to your business. After returning home, you were interested in finding out your customer lifetime value so that you could develop promotional campaigns to improve your CLV. In order to calculate the CLV metric, a speaker at the marketing conference suggested that you use data from your company’s books related to four variables. The first variable is average value of sales per year. Your books showed that on average, the average value of sales per year was $750. The second variable is average customer acquisition cost. It includes promotion expenses, sales expenses, and your costs of attracting new customers during the first year, and it was found to be $400. The third variable, average customer retention rate, consists of the percentage of customers that will most probably buy from your store next year, and it was found to be 70 percent. The fourth variable, customer retention cost, is the cost of keeping customers loyal to your business, and it was found to be $100. Now that you have all the figures that you need, you take your notes out of your briefcase to check the formula that you learned at the marketing conference. The version of CLV they presented at the conference was: Customer lifetime value = [1 / (1 – Average customer retention rate)] X (Average value of sales per year) – (Average customer acquisition cost + Average customer retention cost). Using the worksheet below, you will need to input the data and create the formula in the required cell. Replace the variables in the formula above with the appropriate cell. 1. For the above data, what is the current CLV? -$511 $2,100 $511 $2,000 2. You were unhappy with your current CLV, so you conducted a promotional campaign that included advertisements in local newspapers, magazines and TV commercials to increase your customer value. The new data show that acquisition cost = $300, retention rate = 75 percent, retention cost = $150 and customer average value per year = $850. What is your new CLV? $2,950 -$461 $3,000 $461 3. Your new results still fell a little bit short of meeting your business goals. So, you were motivated to develop one more promotional campaign that included several channels of social media. Your updated data show that acquisition cost = $250, retention cost = $200, retention rate = 80 percent and customer average value per year = $2,500. What is your updated CLV? -$482 $12,050 $482 $15,020

4. You were happily surprised with the results. So, you decided to launch a new campaign to provide special attention to and take care of your clientele. You invite your customers to a private dinner party at a fancy French hotel restaurant in Lahaina with your products displayed in the background. After a few months, you notice that your data show that acquisition cost = $200, retention cost = $100, retention rate = 85 percent and customer average value per year = $1250. What is your new CLV?

$315

$8,033

-$315

-$8,033

5. As a marketing manager, which element of the formula do you think is the most important to obtaining a higher CLV?

customer retention rate

customer average value per year

customer acquisition cost

customer retention cost

Hoffman Ltd makes two types of portable cooking stove, the Lightweight (LW) and the Megarange (MR). Last year it produced 4,500 LWs and 500 MRs. The direct materials cost £3.00 for one LW and £10 for one MR. The assembly workers who put the stoves together are all paid at the same rate of £6.30 an hour. When LWs are being produced each operative assembles nine stoves an hour and when MRS are being produced each operative assembles seven stoves an hour. This is the only labour that is classed as ‘direct labour’. The factory uses automated machinery to manufacture the components which are common to both stoves. The other components are bought in. Each stove uses 15 machine hours in its construction. It currently uses an absorption costing system but is considering introducing an activity-based costing system. The current overhead absorption rate is based upon machine hours. Last year’s activities have been analysed as follows: Activity Cost driver Activity Cost pool Purchasing Purchase order 20,000 Training Training hour 1,000 Setting up machines No. of set-ups 2,250 Running machines Machine hours 14,250 Total 37,500 The analysis also quantified the number of cost drivers by each stove: Activity No of cost drivers caused by LWs No of cost drivers caused by MRs Purchasing 360 40 Training 20 30 Setting up machines 60 30 Running machines 67,500 7,500 Tasks: 1. Calculate the absorption cost for each type of stove. 2. Calculate the activity-based cost for each type of stove.

The following data was collected for a random sample of 10 electoral districts during the last federal election. The first variable reports the percentage of individuals in each district who belong to the working class; the second variable reports the percentage of individuals who are unemployed; and the third variable reports the percentage of eligible individuals (i.e., citizens at least 18 years old) who voted in the last federal election.

35. Find the mean and standard deviation of each of the three variables. Round to 2 decimal places.

    A) (i) Percentage working-class B) (ii) Unemployment rate C) (iii) Voter turnout

36. How would you describe the distribution of the variable percentage working-class?

    (a) Approximately bell-shaped or symmetric or Normal (b) Left (or negatively) skewed (c) Right (or positively) skewed) (d) Too little information to tell

37. Calculate the correlation between each pair of variables. Round to 2 decimal places.

    a) (i) Percentage working-class & unemployment rate b) (ii) Percentage working-class & voter turnout c) (iii) Unemployment rate & voter turnout

38. Calculate the appropriate test statistic for each correlation. Round to 2 decimal places.

    a) (i) Percentage working-class & unemployment rate b) (ii) Percentage working-class & voter turnout c (iii) Unemployment rate & voter turnout

39. Find the critical value of t (α = .05) for each correlation.

    a) (i) Percentage working-class & unemployment rate b) (ii) Percentage working-class & voter turnout c) (iii) Unemployment rate & voter turnout

40. setting your level of significance at α = .05, for which pairs of variables did you find a statistically significant relationship? Choose all that apply.

    (a) Percentage working-class & unemployment rate (b) Percentage working-class & voter turnout (c) Unemployment rate & voter turnout
    (d) None of the pairs are significantly related to one another.

1. A 345-room hotel’s food and beverage department recorded food revenue of $3,460,397.5 and beverage revenue of $1,483,027.5. The cost of sales was 27.3% of F & B revenue, and the departmental expenses were 43.2% of F & B revenue. What is the gross profit percentage for the hotel’s F&B department?

2.

Determine the Profit Margin if the Gross Room Rate increases by 15% in year 2.

In dollar and percentage terms, how much did Net Profit increase in year 2?

In absolute and relative terms, how much did profit margin increase in year 2?

What would the Gross Room Rate need to be if a Profit Margin of 50% is required?

Problem 1:

You have received the following projected income statement from an employee of your company:

Sales                                                                              $86,000,000

-Variable costs                                                                       ?

- Fixed costs                                                                           ?

                                                                                       ---------------

EBIT                                                                                      ?   

- Interest                                                                            4,050,000      

                                                                                       ---------------

Profit before tax                                                             19,450,000            

- Tax                                                                                  5,450,000    

                                                                                       ---------------

Net Income                                                                     14,000,000

The employee (UW-Eau Claire grad) is confused on the meaning of variable versus fixed costs and could not finish the statement. I have assured the employee that you will not have any problem finishing this. The Company has a 54% variable cost percentage.

After completing the income statement, determine the following:

A. The breakeven point in dollars.

B. The DOL based on the above statement.

C. The DFL based on the above statement.

D. The DCL based on the above statement.

5. If sales are up 4% from our expected level, what happens (percentage-wise) to EBIT, Net Income and EPS? Assume we have 250,000 shares.

Part 2:

The following unadjusted trial balance is for Groenke Construction Company as of year-end for the December 31, 20x7 fiscal year. The December 31, 20x6 credit balance of the stockholders’ equity account is $50,500, and the stockholders invested $45,000 cash in the company during 20x7.

1. Account Title Debit                     Credit

101         Cash                                                      $15,000

126         Supplies                                               $8,500

128         Pre-paid insurance                          $11,200

167         Equipment                                          $175,000

168         Accumulated depreciation – equipment                 $19,000

201         Accounts payable                                                               $9,250

251         Long-term notes payable                                               $45,000

301         Shareholders’ equity                                                      $106,900

302         Dividends                                            $15,750

401         Construction Revenue                                                   $153,000

623         Wage expense                                  $61,800

633         Interest expense                               $6,250

640         Rent expense                                    $15,750

683         Property tax expense                    $12,500

684         Repairs expense                                $6,100

690         Utilities expense                                $5,300

TOTALS                                                            $333,150                  $333,150

Instructions:

Use the template provided to:

1. Journalize the following adjusting entries as of fiscal year-end December 31, 20x7.
2. Post the adjusting entries to an unadjusted trial balance and prepare the adjusted trial balance.
3. Create financial statements, namely: i) the income statement, ii) statement of stockholders’ equity, and iii) the balance sheet for 20x7.

Adjustments needed:

1. The supplies available at the end of the fiscal year 20x7 are at a cost of $5,700.
2. The company's employees have earned $3.500 in accrued wages for the fiscal year.
3. The cost of expired insurance for the fiscal year is $8,600.
4. The rent expense not yet paid or recorded in the fiscal year is $2,250.
5. Annual depreciation on equipment is $8,000; no other depreciation adjustment was made in 20x7.
6. The $450 accrued interest for December has not yet been paid and reported.
7. Additional property taxes of $625 have been assessed for the fiscal year but have not yet been paid or recorded in the accounts.
8. The December utilities expense of $425 is not included in the adjusted trial balance, because the bill arrived after the trial balance was prepared. The $425 amount owed needs to be recorded.

The following unadjusted trial balance is for Groenke Construction Company as of year-end for the December 31, 20x7 fiscal year. The December 31, 20x6 credit balance of the stockholders’ equity account is $50,500, and the stockholders invested $45,000 cash in the company during 20x7.

1. Account Title Debit                     Credit

101         Cash                                                      $15,000

126         Supplies                                               $8,500

128         Pre-paid insurance                          $11,200

167         Equipment                                          $175,000

168         Accumulated depreciation – equipment                 $19,000

201         Accounts payable                                                               $9,250

251         Long-term notes payable                                               $45,000

301         Shareholders’ equity                                                      $106,900

302         Dividends                                            $15,750

401         Construction Revenue                                                   $153,000

623         Wage expense                                  $61,800

633         Interest expense                               $6,250

640         Rent expense                                    $15,750

683         Property tax expense                    $12,500

684         Repairs expense                                $6,100

690         Utilities expense                                $5,300

TOTALS                                                            $333,150                  $333,150

Instructions:

Use the template provided to:

1. Journalize the following adjusting entries as of fiscal year-end December 31, 20x7.
2. Post the adjusting entries to an unadjusted trial balance and prepare the adjusted trial balance.
3. Create financial statements, namely: i) the income statement, ii) statement of stockholders’ equity, and iii) the balance sheet for 20x7.

Adjustments needed:

1. The supplies available at the end of the fiscal year 20x7 are at a cost of $5,700.
2. The company's employees have earned $3.500 in accrued wages for the fiscal year.
3. The cost of expired insurance for the fiscal year is $8,600.
4. The rent expense not yet paid or recorded in the fiscal year is $2,250.
5. Annual depreciation on equipment is $8,000; no other depreciation adjustment was made in 20x7.
6. The $450 accrued interest for December has not yet been paid and reported.
7. Additional property taxes of $625 have been assessed for the fiscal year but have not yet been paid or recorded in the accounts.
8. The December utilities expense of $425 is not included in the adjusted trial balance, because the bill arrived after the trial balance was prepared. The $425 amount owed needs to be recorded.

Calculating Weighted Average Cost of Capital and Economic Value Added (EVA)

Ignacio, Inc., had after-tax operating income last year of $1,197,000. Three sources of financing were used by the company: $2 million of mortgage bonds paying 4 percent interest, $4 million of unsecured bonds paying 6 percent interest, and $10 million in common stock, which was considered to be relatively risky (with a risk premium of 8 percent). The rate on long-term treasuries is 3 percent. Ignacio, Inc., pays a marginal tax rate of 30 percent.

Required:

1. Calculate the after-tax cost of each method of financing. Enter your answers as decimal values rounded to three places. For example, 4.36% would be entered as ".044".

2. Calculate the weighted average cost of capital for Ignacio, Inc. Round intermediate calculations to four decimal places. Round your final answer to four decimal places before converting to a percentage. For example, .06349 would be rounded to .0635 and entered as "6.35" percent.

%

Calculate the total dollar amount of capital employed for Ignacio, Inc.

$

3. Calculate economic value added (EVA) for Ignacio, Inc., for last year. If the EVA is negative, enter your answer as a negative amount.

$

Is the company creating or destroying wealth? Creating or Destroying

4. What if Ignacio, Inc., had common stock which was less risky than other stocks and commanded a risk premium of 5 percent? How would that affect the weighted average cost of capital? Higher, Lower, or Unaffected

What is the new EVA? In your calculations, round weighted average percentage cost of capital to four decimal places. If the EVA is negative, enter your answer as a negative amount.

$

Calculating Weighted Average Cost of Capital and Economic Value Added (EVA)

Ignacio, Inc., had after-tax operating income last year of $1,195,500. Three sources of financing were used by the company: $2 million of mortgage bonds paying 4 percent interest, $4 million of unsecured bonds paying 6 percent interest, and $10 million in common stock, which was considered to be relatively risky (with a risk premium of 8 percent). The rate on long-term treasuries is 3 percent. Ignacio, Inc., pays a marginal tax rate of 30 percent.

Required:

1. Calculate the after-tax cost of each method of financing. Enter your answers as decimal values rounded to three places. For example, 4.36% would be entered as ".044".

Mortgage bonds
Unsecured bonds
Common stock

2. Calculate the weighted average cost of capital for Ignacio, Inc. Round intermediate calculations to four decimal places. Round your final answer to four decimal places before converting to a percentage. For example, .06349 would be rounded to .0635 and entered as "6.35" percent.

%

Calculate the total dollar amount of capital employed for Ignacio, Inc.

$

3. Calculate economic value added (EVA) for Ignacio, Inc., for last year. If the EVA is negative, enter your answer as a negative amount.

$

Is the company creating or destroying wealth?

4. What if Ignacio, Inc., had common stock which was less risky than other stocks and commanded a risk premium of 5 percent? How would that affect the weighted average cost of capital?

What is the new EVA? In your calculations, round weighted average percentage cost of capital to four decimal places. If the EVA is negative, enter your answer as a negative amount.

$